welcome back i'm melissa lee. tyler will join us in a moment we're near the session highs the dow up more than 500 points. the nasdaq hitting a record high again as big tech koptss to power this market higher speaking of being on the fast track, tesla is on fire. shares jumping again today another electric vehicle company about to hit the market. "power lunch" starts right now

>> hi, everybody hello, melissa it's great to be with you, sort of, here back in the kitchen the s&p at its highest level in about a months time. you have amazon, you have apple, you've got alphabet. aaa right there. facebook and netflix as earning season kicks off this week the big banks starting tomorrow. let's get to bob for more. >> a little bit of a milestone just about 40 minutes or so ago. we turned positive for the year on the s&p 500 i know it's hard to believe we started the year on the s&p about 3231 we're a bit below that we did hit it about 40 minutes ago. we positive for the year the low for the year, 2191 that was on march 23rd the high, february 19th, 3393. we're still below that but not by an awful lot. quite a remarkable run if we with close over 3232, that

will break out to its highest level since february the bottom line is markets on an upswing here tyler told you about the new highs if faangs. some of the stay at home names. walmart x costco clorox also intraday high. we're tacking about earnings tyler was mentioning that. the bull case for a recovery is pretty clear now the second quarter was the bottom that's all anybody believes right now. that's all anybody has conviction on. we'll see if that's true but there's been very low expectations the numbers are at therapy lowest ebb right now they are starting to go up a little we'll see if they improve but the basic theory is the reopening will continue even if there are interruptions. the numbers will get better. here's the problem take a look at pepsi small beat here but no guidance. the company came out and said this morning we're not sure what's going on. we can't provide you guidance. they joan general millin generas

back to you. >> bob, thank you. coronavirus cases on the rise across the u.s. as 20 states have reported a record high average of new infections in the past week >> let's start with that vaccine news it's driving shares of pfize up substantially. a little more than people in the biotech world would expect based on this news alone what a fast track designation does is say the fda has identified this as a problem that needs attention and fast tracking through the regulatory process. really any coronavirus vaccine should be given fast track designation and through

operation warp smepeed, northea a -- most are they expect it could possiblily get approval of this vaccine in the fall on an emergency basis if all goes well they are heading towards phase three clinical trials and given the numbers of infections in the united states right now, there will be a lot of infection to test these vaccines on here is a list of hot spots right right now from evercore isi. corpus christi, texas, the area with the fastest case growth seeing cases double every nine days also seeing boise as well as mcallen, texas and lakeland, florida fp dr. anthony fauci was asked about whether the case growth in the country and whether shutdowns might be needed again here is what he said >> i'm really confident we can

if we step back. you don't necessarily need to shutdown again pull back a bit and forsee ina prudent way observing the guidelines of going from step to step >> there's been talk that we might need shutdowns in cases seeing the case growth dr. fauci saying maybe not that far but we need to take a step back back to you. >> all right thank you very much. stocks rally on those vaccine hopes that meg just detailed there but worries remain on the strength of the recovery as we enter earnings seasons. joinings now is scott clemons and rachel, vp and portfolio manager at rockland trust. both of you see some concern about the narrowness of the markets rally.

it leaves a lot of other stocks behind and might catch up at some point let me begin, scott, with you. is it more of an opportunity or more of a risk >> in the segment by looking at stocks that have powered the market forward they are two sides of the same coin but we're seeing opportunities in the market. it seems like a contradiction in terms but the fact of the matter is because the market is to narrowly led, the index itself, the s&p doesn't accurately reflect the experience of the average stock because it's so dominated by that small hand full of names that are driving the market higher. the starkest way to see that is to observe we're flirting with a flat year to date on the s&p 500. the s&p equal weighted index,

same constituents remains 10% down year to date. we're finding opportunities out there. >> the same question to you. is the fact that the market is so dominated by five or six stocks and we know their names almost by heart now. is that more of a vulnerability, a worrisome thing. if apple falls out of bed, a lot of people will sell because they will see the dominance fall away or is it more an opportunity because for example, small cap stocks or medium stocks have not participated here. >> tyler, thank you for having me i do agree with scott that it presents opportunity i think the way that we look at it is if you look at those market leaders that meg cap tech constituency they were doing extremely well prior to the

downturn we saw in the market. they are doing well through it we don't see it's necessarily troubling. what we do look at under the surface as scott mentioned is the average stock is not doing as well. the aver rage number of stocks trading bovr has declined. it's more on the reopening or cyclical side of the business line and find opportunities to buy companies that with benefit when we come out on the other side >> let me follow up if i might there. i know that you say the market is moving up as if on an elevator from the march lows whether the economy is moving up

as if it's coming up on the stairs how much time does the market have before it starts getting penalized if company earnings and the economy doesn't come back to justify the valuations which by some standards are pretty stretched right now we have a few months to see what happens with the pace and speed of spread that we're seeing reignited rite now in our country. what our response will be on that end

>> scott -- i'm sorry for interrupting scott make the case, scott, for small cap stocks which you see as the target of opportunity here >> part of it is simply for valuation that small caps lagged so much with the s&p roughly flat year to date. the russell 200 sma0 small cap l down. i think it's a fundamental argument as well as a valuation argument for smaller public companies. >> interesting ideas from both of you we thank you very much melissa. to the bond market we go rick is tracking the action at

the cme. hey, rick. >> if you look at a two-day chart, what you'll see is we came off 56 basis point intraday low. if we look at what's going on with respect to the tens minus two spread, it's widened a couple of basis points since last thursday's 46 basis point close but the point of the matter on this chart is is basically after hitting two month narrowest its traded, it's just acting swequeamishsqueamis. you'll see it's hovering near four-month highs it's been steadying gradual.

tyler, back to you >> i'll take it, rick. we have a news alert on the u.s. federal budget >> the u.s. budget deficit continues to shatter records up until this point as spending to combat the coronavirus far out paces the revenue that the government is bringing in. for month of june, the u.s. budget deficit widened to a record $864 billion for the full year the full fiscal year so far. that deficit is $2.7 trillion. by comparison in june of last year, the budget deficit for just the month was $8 billion. what we are seeing for the month of june this year is more than 100 times what the budget deficit was just one year ago. much of that is because the federal tax filing deadline was delayed from april to july that is delaying a lot of

receipts of revenues for the government but this spending is happening in historic proportions in some of these data just reaffirm that. guys >> numbers are truly breathtaking there coming up, at least hitting another record high today before fading turning negative but the stocks run has made the ceo more valuable than the oracle himself warren buffet. that's not the paste you put on a wall it's a special purpose aqcuisition company. we'll tell you why we'rsee eing more and more of those get out your putty knife we'll talk about it after the break. this is decision tech.

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we are keeping a close eye on the nasdaq taking a quick turn intraday. you can see the dip in the charts as you take a look at the stocks, netflix, facebook, tesla, all the shares hitting a new 52-week high we'll keep a close eye on this ty all right. tesla shares reversing as you mentioned there briefly into the red after it hit new highs in

the session. it's among that group of stocks that have turned lower the stock is up 300% this year that's good news for tesla investors and namely the ceo elon musk who just became richer than warren buffet now, another e lek tlectric veh maker is going through a special purpose acquisition company. phil has more. >> what you're looking at there, that's the old fisker. we're talking about the new fisker that's the old karma from fisker 1. we're going to talk first about tesla. the run over the last three months have been astounding. the market cap at $293 billion it reports q2 results next week. that's when we'll find out whether or not it turn a profit

for the second quarter that's the last big hurdle in order to be included in the s&p 500. ceo elon musk can finding himself on pace for another big bonus. he's in line, a $1.8 billion payday that's the second traunch of his pay package. there's his battle -- i couldn't call it a battle it's him and warren buffet in the world's richest man competition. he's surged past warren buffet now the 7th wealthiest man in the world. let's talk about the spac involving spac that is fisker that is merging with spartan merger acquision corp the merger is designed so that fisker can go public and raise a

billion dollars that would help them as they build a new electric vehicle this is it it's called the fisker ocean they will start building it in 2022 and come out shortly after that earlier today, we had talked with ceo henrik fisker about whether or not they can beat tes tesla. he says they can >> i don't think you need to knock tesla off a mountain they have done a terrific job to show that electric vehicles can be desirable and they work better than gasoline cars. i think this is a gigantic market of 80 million vehicles globally in so many different segments >> we're talking about 80 million vehicles all together in the world annual production. we're not talking about electric vehicles that's a very, very small slice of that 80 million tyler. >> all right, thank you. over to you melissa. the special purpose acquision companies are surging

this year or spacs are surging this year. spacs have raise ed 12 billion this year. joining us to discuss the riese of the companies is the ceo of axios. dan, why now >> well because as you usually see on cnbc for the past three months because the markets are incredibly frothy. if you're going to do it, this is the moment. it's very easy to raise capital if you're a spac ipo it's great thing to sell into. the spac process, even though you have to pay the sponsor a bit more than ipo underwriters,

there's less disclosurdisclosure it's faster. the market is full of liquidity for these things. >> it's a lot easier to go public via spac. that has given spac an unsavory reputation i'm wondering if things have changed this time around >> you've hit the nail on the head you're right even five years ago, this was something even goldman sach's wouldn't underwrite. you're seeing really decent brand name people, now bill ackman is pursuing the spac world. you're seeing incredible spaces in the finance world seek out spac's as their next act, new proje project, if you will

it's clear if you go out and do these things, in this market which is looking a little frothy, you will see some pretty strong aftermarket performance especially with these brand name companies. >> i can see where the sponsors do well in these kinds of properties do investors do well what's the history tell us and question number two, where a spac which is known as a blank check company, do you know going in or does the spac sponsor know going in what their target company is going to be who they might merge with? who they might invest in or is that somebody that's tbd >> on the first part, there's some very good examples. things they have done well some they have done poorly

when you buy into a spac as an ipo, you don't know what it will buy. you might have some prod strokes. it's a risk for companies that sell into spacs and you do have redemption rights. >> there's a couple of ripple effects. are spacs versus ipos, how are they in terms of profit blts for banks, it must be difficult, more difficult to sell an ipo if

you got all the competition from spacs. >> with spacs there's still underwriters as you would see with traditional ipo. that will raise $4 billion if you're unwriting $4 billion of shares you'll get a spread on that they will add their own money into that pile in order to acquire that that company, if it went public, depending on how much it floated could provide more fees for the underwriters than the spac would. it's not a large amount of differential there i think the banks are still

meaningful participants in the spacs in the way they may not be for a direct listing which is another mechanism for people to go public. >> all right i'm sure we will hear more and more aboutspacs. thanks two stocks that are benefitting from the stay at home trend and deere getting a boost as one analyst says homeowners are buying up more lawn equipment this mystery chart is an online education company that's up 250% from the march lows. as it helps colleges shifts to virtual classroom environment. we'll tell you the name and the ceo will join us later this hour (vo) audi e-tron. the next frontier of electric. get an exceptional offer at your local audi dealer.

welcome back home builder stocks risings midday today as a report out shows that june was the best month for new home sales in 15 years. >> sales of newly built homes jumped 55% annually. that is the largest annual gain since the last housing crash and would put sales at pace not seen in 15 years or since the height of the last housing boom sales were strongest in the northeast with an 86% annual jump and in florida where sales popped 84% california saw gains but it was the laggard and those sales are allowing builders to raise prices about 57% of those surveyed said they had bumped prices higher. only again in california did prices pull back some. in is in line with a june sales

report from tailor morrison last week there was a 94% jump in june sales. buyers are looking for new high-tech homes with more individual rooms to allow for home office and home schooling several builders will be reporting earnings in next few weeks. i expect to see some big numbers. thank you very much. for more on the booming home front, let's go to seema mody for trading nation >> one name that is benefitting that may not be as obvious, farm equipment maker deere. strong demand for out door products like lawn mowers and garden equipment over the past three months let's discuss the stock and where it's trading

>> i'm encouraged by the call. i've been doing a lot of gardening myself in this environment but when you look at the numbers even if john deere turns around and hits the numbers that theage i agnalysts projects for 2021, it shows them with a multiple of about 17, which for this stock is very, very rich. i'm really not sure you're getting a lot of value with this especially with so much debt deere has an incredible amount of debt on the balance sheet i'm encouraged by the call i like it. it's not a fast grower i wouldn't be a buyer here >> treating at a price to e price-to-earnings ratio well above its peers. performing better than a number of the industrials where do you think it heads from here

>> from a short term perspective to see this stock gap up on good news is a good thing i do think we can see upside followed through here in the near term. momentum supports it we saw deere broke out from a triangle formation along with major indices. i would note that deere is a long term underperformer there's probably a reason for that the chart has been range bend for years now and it puts very significant resistance around 180. that's a very big hurdle for deere. there's good room between here and there so that support upside follow through i think it will be challenged near those highs >> we need to ban for china. thanks for joining us. for more trading nation head to our website or follow us on twitter. back to you. ahead, we'll teach you a thing or two about today's soaring mystery stock. mgm reopening its massachusetts casino but it comes with a catch

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welcome back, everybody. here is your cnbc news update at this hour. two of the nation's largest school districts will not have in-person classes this fall. the los angeles and san diego united school district say they will continue with online learning indefinitely as that state's number of coronavirus cases continues to rise. also in california, search party ies have found a body in e

lake where "glee" actress went missing. local officials have scheduled a news conference for 5:00 p.m. eastern time in new york city, the black lives matter mural in front of trump tower had red paint splashed on it trump has described it as a symbol of hate you are up to date that's the news update this hour back to you. thank very much. off the session highs. the s&p 500 which turned positive for 2020 is now at session lows we're at 3199. we gave up 3200 here let's zero in on the nasdaq. that turned negative a moments ago. we have been watching a lot of big cap technology stocks names like tesla, amazon as well as facebook ty >> all right while colleges and universities do expect to take a big financial hit no matter what they decide to do with respect to in-person or online classes,

there is a silver lining here. summer school. ylan joins us to detail it >> you're right. school is in this summer with colleges across the country seeing record enrollment the system is up 9% with individual campuses reporting double digit increases in enrollment arizona state university, the count country's largest public university system is up 16.5%. a lot of these classes are online asu says most of its students are already enrolled they are just continuing their education but also this year, they saw a rise in the number of first year students who took classes. it more than doubled to more than 2,000 >> students said, hey, again, i don't have a job i can't travel i can't go to camp, but i can

take classes i can take classes to get ahead in my college career or double major. >> reporter: july is supposed to be the peak month of employment for students but the sectors are leisure and hospitality and retail those aren't really options right now. back over the you. >> no, indeed they are not thank you very much. time now to reveal to you that mystery chart we have been teasing you with all hour long there it is. year to date, up 70% the company is up more than 250% since hitting a low back in march. the stock chart belongs to the online education company the company is in a sweet spot benefitting for the need for colleges to have the abilities to transition to online education as many have done and more will this fall.

chris is the co-founder and ceo of that company. chris, i'm sorry, i mangled your name welcome. thank you very much for joining us >> no problem. thrilled to be with you. >> we're delighted we're happy you're doing well in your endooeendeavors. what makes the difference between online superb online instruction. >> doing online learning well is not only possible, it's very obvious. not only does it not have to be worse than campus instruction. something the president just said it can be better i think we have proven it over 12 years you have to be intentional about it

you have to actually give students high quality content for them to consume on their own time so a single 2u course has more content than a season of game of thrones. whn y when you go to class, you're in a robust discussion learning at a deeper level that whole flip classroom notion has been key to our success. we just passed 225,000 students. we're doing this at a scale that most people haven't. we hit 800,000 classes >> drill down a bit more, chip, if you would on what it is specifically that makes the experience so good is it that the lectures are online is it supplemental content that's supplied as part of this experience and what is that like what is that supplemental

content. is it videos is it moves that people might watch? what it is that makes separates the good from the not so good? >> i hate to say all of the above but it really is all of the above. we build a come prehence ifr program for university partner that incorporates high quality video content. a lot of readings. books are still good whn you get the student from the interactive lesson into their live class, it's not just 90 minutes having somebody talk to you. you're actually fully engaged. you need to engage students and then it's not just when the live class ends you have to support students and bring them together in way that is very possible online.

i feel like we're all just talking about it as if we all just discovered the internet i started the company 12 years ago. you can put something great if you put your will towards it we have great schools from all over the world, including some that you mentioned, yale, harvard, syracuse, berkeley. they are great institutions that have embraced it and doing it well what we all just experienced in the spring was a forced way of remote instruction that wasn't very good. that doesn't mean that it can't be great you really can do something great if you put your mind to it >> how quickly can a school get their courses online we saw first wave in the spring and some schools are debating whether or not to reopen fully or partially reopen in the fall.

how quickly can this be done how do you get paid what is the recurring part of your revenue stream? >> it's not easy to do this. i feel like the schools are in a real bind. none of us expected the nba to have to cancel their games i got a pel grant to attend george washington and it completely changed my life offering that program to the world in fally online version that will be at about 50% of the campus price you take our amherst relationship if it's going online, you think about the prestige of that great liberal arts institution going online, it's something that --

this is a paradigm shifting moment for higher ed there's no doubt you'll need to do it we have spoken to more university presidents and provosts in the past four months than in 12 years it's been super intense. to your point about the revenue model. go ahead >> answer melissa question, please >> we invest in each program and we share tuition revenue over really long contract in the case of our degree business, our undergraduate relationship with the london school of economics which will launch here in the fall, that's a ten year relationship. these are long relationships, long contracts we are doing the investment not only up front to build up but to market the program and to offer things like clinical policeman for programs like a mid whiifer program where you deliver the babies you need to go into a clinical environment and deliver the

babies we provide a comprehensive solution >> all right we got to leave it there fascinating business model fascinating story. we appreciate your time today. coming up, another mystery chart today. another company that's benefitting as the coronavirus drags on it's not on education company though it does involve tests many people are working from home and they say it is here to stay we will hear from someone who says the office will be back experience the adventure of a bigger world in a highly capable lexus suv. at the golden opportunity sales event. get zero percent financing on all 2020 lexus models. experience amazing at your lexus dealer.

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expecting thanks to huge demand for covid-19 testing that's up 4% a chip deal. analog buying maxim integrated for $21 billion. herbalife saying it will not pay more than $50. the stock is bovr that the company announcing strong sells for the second quarter ty casino stocks are moving higher today as china starts to lift restrictions on mcow. three casinos in massachusetts are reopening but with some very strict guidelines. contessa is live in springfield. >> reporter: people inside playing as we speak. the real question is, will the capacity limits limit the profit that these casinos can turn in massachusetts? i'll have lots more right after this break on "power lunch."

welcome back, everybody. casinos around the country have been reopening with different rules in each state. and today three casinos in massachusetts are back in business, but as the state's numbers rise, they are opening with the strictest guidelines yet. contessa brewer is live in springfield with our story contessa >> reporter: hi, tyler there are now 200% more seats in the outdoor patio on mgm casino, and inside we have seen the gaming tables, well, there's people sitting at them, even on a monday afternoon they have six-foot-high plexiglas shields up

the table games, for social distancing, and slot machines are turned off for social distancing reasons the restrooms even have seen their hand dryers turned off to avoid blowing the air around the customers, they tell me, have come to the executives and said, hey look, we've been a little bit concerned about coronavirus. and yet mgm has a lot of practice reopening >> what we want to do is reopen the right way, and what that means is rebuilding relationships, rebuilding that sense of trust today by placing health and safety at the center of everything that we do we think we've created a very compelling option for our guests to make that choice to come back and to feel comfortable and safe in doing so. >> reporter: so the massachusetts reopening, macao is also seeing restrictions easing on tourist visas.

we've been told there will no longer be a 14-day quarantine on visitors going back to guangdong province, a big feeder for gamblers in macao. >> certainly is, contessa. i'll take it coming up during the coronavirus pandemic, a lot of people are watching "the office" but not that many people are going to the office is work from home here to stay or a temporary solution? that is next on "power lunch." you can watch or listen to us live on the app.

with more people working from home in this pandemic many experts have their doubts about the future of the office, but in a new report moody's says there is still value in commercial real estate. here to explain is the vice president and senior credit officer at moody's and a

co-author of the report. so many findings are interesting. for one, productivity longer term is better if there's an office involved? >> yes hi, melissa. that's one of the interesting things we saw. there's a lot of studies that show differing results of productivity if you look at very narrowly, for instance, at individuals for productivity during a specific task, it can go up a minute you take a step back and look at the overall productivity elements like collaboration, teamwork, creativity that comes from having people in a centralized office that's one of the key reasons why the evidence is suggesting we will not go wholesale into a remote work situation at the expense of commercial real estate >> and you also found that millennials prefer being in an office setting because the mentoring experience may be morrmore robust than if they're sitting at home in a studio apartment alone. at the same time, blair, is this

a way of saying commercial real estate is going to fare better than what a lot of people are expecting? the assumption has been that there are going to be so many companies that will be forced to downsize, that commercial real estate will be in trouble as opposed to choosing, there being a choice involved, which is what this study sounds like >> it's important to make a distinct between potential reductions in a footprint caused by economic reasons versus this piece which was more around the implementation of remote work and causing a long-term structural shift in the use of office one thing you have to bear in mind is there are structural impediments to a sea change happening overnight. you look at the long-term nature of office leases for small to medium and users is nine years for large office users it's 12 years. a very gradual, less than 20% of all office leases in the next 18

months a minority of companies will be thinking about whether or not they will change their office footprint as a result of what's happened in the last six months within the kind of hangover period of what's going on right now. >> so, blair, even if i buy your thesis that commercial real estate will persist and survive in some form and there isn't going to be a wholesale migration to only a work at home environment in knowledge-based industries, i can't help but notice you're working, i presume, out of your home or apartment. at moody's, what percent of people are going into the office today? and how quickly do you expect to be back in the office? and when you get there, what percentage of the people who used to be there do you think will still be there? >> well, yes -- >> six months from now, two months from now. >> i'm working from home right now and have been, like most people, since early march. for us the time line is not

established yet, but i think most of the announcement we've seen in general from companies it will be some time q3, perhaps even q4. really i think what we were trying to do with this is look beyond the immediate term and look to what are the long-term implications of this i think we do believe that for health reasons we've gone through this work remote experiment, but when we can return to the office, again, will people? the suggestion is that they will because of the productivity benefits and from having multiple people in the same environment. >> blair, we're going to leave it there interesting study. blair coulson of moody's tyler, you're in your kitchen, so you're working from home. i know you like being in the office as well >> i'm in my kitchen, and i feel pretty doggone productive.

i'm guilty, i'm sorry to say, i feel productive. i've knocked an hour out of my day by not commuting, so on and so forth the footprints, because it will be cheaper, are going to be smaller for big companies. >> good to see you, tyler. see you tomorrow thank you for watching "power lunch. "closing bell" starts right now. it certainly does. welcome to "the closing bell." i'm wilfred frost along with sarah eisen. the s&p 500 at one point got back to break even for a whole but is well off the highs of the day. let's have a look at what is driving the action more positive news in the search for a vaccine as two company candidates get fast tracked by the fda. another major spike in the u.s. in coronavirus cases, and now stocks are sliding in part as